Raonic had played only one match since February prior to arriving in Istanbul because of a hamstring problem but found form straight away on the clay.
However, it was Cilic who proved just the stronger in the title decider, winning the opening set on a tie-break and then securing the only break of serve in the second to triumph 7-6 (3), 6-3.
Raonic had his chances -- creating seven break points in the match -- but Cilic saved all of them, helped by nine aces.
The result marked Cilic's first victory on clay for the first time in five years. His lone previous clay-court victory had come on home soil in Umag in 2012.
Cilic moves to No. 7 in the Emirates ATP Rankings, adding 250 points.